a column by Wei Cui and Vincent Sterk for VOX: CEPR’s Policy Portal
The effects of quantitative easing are poorly understood, in part because standard models of monetary policy predict that it doesn't work.
This column uses a model in which households can be unequal and hold assets with different degrees of liquidity to show that quantitative easing can provide a powerful stimulus to the macroeconomy, and that it avoided a large decline in output and inflation during 2009.
Nevertheless, side-effects on inequality mean that social welfare tends to be lower under quantitative easing than under conventional policy.
Continue reading
I still don’t understand what is being talked about and I feel that I should.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment